The European Business Association (EBA) supports the cancellation of the VAT exemption on imported goods valued at up to EUR 150, as stated in an official letter from the association to the Chairman of the Committee of the Verkhovna Rada of Ukraine on Financial, Tax, and Customs Policy, Daniil Hetmantsev.
"The Association's position is based on the belief that the current regulation leaves numerous opportunities for tax evasion by unscrupulous entrepreneurs. This includes, for instance, splitting orders into several parcels, altering the value of goods, and importing large volumes of goods in accompanied and unaccompanied luggage," the EBA notes in a statement on their website on Friday.
The statement also cites data from a study by the Institute of Socio-Economic Transformation, indicating that among the 100 largest recipients of international postal shipments, 81 individuals collectively received nearly 18,800 parcels over nine months in 2024, averaging 232 parcels each. None of these parcels exceeded the value of EUR 150, thus qualifying for VAT exemption.
Under these conditions, the association believes that one individual receiving just one postal shipment per day could import goods worth up to EUR 4,500 tax-free in a month. Therefore, this concerns industrial batches of goods effectively exempt from taxation.
Experts from the association argue that the current preferential tax regime for small batches of goods distorts competitive conditions in the domestic market, creating more favorable tax and customs conditions for foreign manufacturers and marketplaces.
Moreover, the existence of such a tax exemption, according to the study, deprived the state budget of at least UAH 11.8 billion in VAT revenue for 2024. Customs revenues from these goods could have accounted for at least half of that amount.
Additionally, the EBA noted that Ukraine is gradually harmonizing its tax and customs legislation with European Union norms.
The association reminded that in the EU, the VAT exemption for low-value parcels (up to EUR 22) was abolished in 2021, and customs payment regulations are being improved with a trend towards mandatory declaration of all parcels, regardless of their value.
According to the member companies of the Association, this led to a significant increase in VAT revenues in EU countries and also contributed to the growth of tax revenues from residents who gained a competitive advantage over foreign marketplaces.
At the same time, the Association's experts understand the necessity of simplifying the customs clearance process for parcels that are subject to or will be subject to taxation to avoid delays in the delivery of any parcels to Ukraine.
"It is especially important to ensure further unhindered imports for the defense forces of Ukraine," the association emphasizes.
Furthermore, the EBA has been actively involved in the development of draft laws submitted for registration in the parliament by the parliamentary finance committee. At the same time, experts have provided their comments on the documents regarding the simplification of the customs clearance process, ensuring an effective mechanism for controlling abuse by unscrupulous entrepreneurs, and establishing clear deadlines for the implementation of the provisions of the draft laws.
In summary, the association promised to carefully review the text of the draft laws after their publication and, if necessary, contribute to their refinement to help prevent abuses and simplify the process of ordering goods from abroad for citizens and defense forces.
As reported, on January 15, Hetmantsev submitted for registration the draft laws developed by business associations regarding amendments to the Customs and Tax Codes concerning the taxation of parcel imports, which, in particular, propose to tax all parcels from foreign marketplaces with VAT.
According to him, the draft laws propose not to impose VAT on goods valued at up to EUR 45, provided that such parcels are sent to individuals without payment and for non-commercial purposes. At the same time, goods purchased on marketplaces and similar platforms will be subject to VAT, regardless of their value, and import duties will only be charged on goods priced over EUR 150.
The documents also provide for the introduction of the possibility of VAT payment directly by the suppliers of goods or marketplaces, similar to the European IOSS mechanism.